March 2, 2016 / 11:18 PM / 4 years ago

REFILE-UPDATE 1-Bondholders lose bid to delay lifting Argentina injunctions

(Corrects day of hearing in 5th paragraph to Tuesday)

By Nate Raymond

NEW YORK, March 2 (Reuters) - A U.S. judge on Wednesday rejected a request by Argentine bondholders who reached a $4.65 billion settlement resolving litigation over defaulted bonds to wait longer before lifting injunctions that restrict the country from paying off some debts.

U.S. District Judge Thomas Griesa in Manhattan said while he appreciated arguments by the creditors to wait 30 more days, “circumstances have changed so significantly as to render the injunctions inequitable and detrimental to the public interest.”

The ruling itself will automatically be stayed for two weeks to allow for expected appeals. It is conditioned on Argentina repealing two laws concerning its debts and paying creditors who by Monday reached $6.2 billion in settlements with the country.

The creditors include Elliott Management’s NML Capital Ltd and Aurelius Capital Management who were part of a $4.65 billion accord announced on Monday.

Despite those deals, NML and other creditors during a hearing on Tuesday urged Griesa to at least wait 30 days on formalizing a Feb. 19 decision in which he indicated he would lift the injunction.

They argued that settlements could fall apart if the remaining plaintiffs, holding 15 percent of the claims in the litigation, are not given a chance to also settle, as they likely would appeal a decision lifting the injunctions.

But Griesa said there was a “pressing need for certainty and finality” for those settlements to succeed and that further delay could “seriously erode” Argentina’s ability to raise capital to fund the deals.

He also said his decision placed no limit on the remaining plaintiffs from reaching agreements with Argentina, even if they chose to appeal.

“The injunctive relief cannot be allowed to be used as a tool for leverage in negotiations,” he wrote.

Attempts to reach Elliott and Aurelius were not immediately successful.

Argentina made the request to lift the injunctions after offering on Feb. 5 to pay $6.5 billion to settle lawsuits by various bondholders stemming from its record $100 billion default in 2002.

Argentina says $6.2 billion in deals have been reached with creditors who spurned its 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

The injunctions at issue prevented Argentina from servicing its restructured debt until it paid the holdout investors. (Reporting by Nate Raymond in New York; Editing by Diane Craft and Andrew Hay)

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